Correlation Between Lutian Machinery and Zhejiang Yayi
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By analyzing existing cross correlation between Lutian Machinery Co and Zhejiang Yayi Metal, you can compare the effects of market volatilities on Lutian Machinery and Zhejiang Yayi and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lutian Machinery with a short position of Zhejiang Yayi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lutian Machinery and Zhejiang Yayi.
Diversification Opportunities for Lutian Machinery and Zhejiang Yayi
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lutian and Zhejiang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lutian Machinery Co and Zhejiang Yayi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yayi Metal and Lutian Machinery is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lutian Machinery Co are associated (or correlated) with Zhejiang Yayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yayi Metal has no effect on the direction of Lutian Machinery i.e., Lutian Machinery and Zhejiang Yayi go up and down completely randomly.
Pair Corralation between Lutian Machinery and Zhejiang Yayi
Assuming the 90 days trading horizon Lutian Machinery Co is expected to generate 0.61 times more return on investment than Zhejiang Yayi. However, Lutian Machinery Co is 1.63 times less risky than Zhejiang Yayi. It trades about 0.02 of its potential returns per unit of risk. Zhejiang Yayi Metal is currently generating about 0.0 per unit of risk. If you would invest 1,523 in Lutian Machinery Co on September 12, 2024 and sell it today you would earn a total of 46.00 from holding Lutian Machinery Co or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lutian Machinery Co vs. Zhejiang Yayi Metal
Performance |
| Timeline |
| Lutian Machinery |
| Zhejiang Yayi Metal |
Lutian Machinery and Zhejiang Yayi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lutian Machinery and Zhejiang Yayi
The main advantage of trading using opposite Lutian Machinery and Zhejiang Yayi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lutian Machinery position performs unexpectedly, Zhejiang Yayi can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Zhejiang Yayi will offset losses from the drop in Zhejiang Yayi's long position.| Lutian Machinery vs. Agricultural Bank of | Lutian Machinery vs. Industrial and Commercial | Lutian Machinery vs. Bank of China | Lutian Machinery vs. PetroChina Co Ltd |
| Zhejiang Yayi vs. Lutian Machinery Co | Zhejiang Yayi vs. PetroChina Co Ltd | Zhejiang Yayi vs. Bank of China | Zhejiang Yayi vs. Gansu Jiu Steel |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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